Australian Federal Police have uncovered a scam which saw an elderly Perth couple unknowingly used as drug mules.

Police say the couple travelled to Canada after being told they had won a free holiday including seven nights accommodation and new luggage.

They became suspicious on their return to Perth and alerted Customs officers who found seven kilograms of methamphetamine hidden in their suitcases.

A 38-year-old Canadian man was arrested at Perth airport and has been charged with importing a commercial quantity of methamphetamine.